20th Aug 2019 10:33
(Alliance News) - Cellcast PLC on Tuesday said it is seeking shareholder approval to change its name and become a cash shell, after agreeing to sell all its operations to its chief executive for GBP375,000 in cash.
The stock was trading 14% lower on Tuesday in London at 1.50 pence a share, giving it a market capitalisation of GBP1.2 million.
Operating subsidiary Cellcast UK Ltd will be sold to Com & Tel Media, which is owned by Craig Gardiner, chief executive of Cellcast. Cellcast Chief Financial Officer Emmanuelle Guicharnaud also serves as a director of Com & Tel Media. Upon completion of the sale, the pair, together with Strategy & Business Development Director Bertrand Folliet, will resign as directors of Cellcast.
As the transaction would result in Cellcast divesting of all of its trading business, activities or assets, the company would be deemed to become a cash shell under the AIM rules.
The move follows "difficult" trading conditions reported Cellcast at the time of its annual results announcement in May. The company, which provides interactive television programming, reported a decrease of 6% in revenue to GBP10.9 million in 2018, due to lower income from the provision of management services and consultancy to overseas gaming and lottery operators.
"This has continued in 2019 year to date," said Chair Mike Neville said in the company's statement in May. At the time, Cellcast directors were preparing to undertake a review of the prospects for the company going forward.
On Tuesday, Cellcast said the proceeds of the disposal - which includes contingent rights to additional consideration - will be used to cover the costs of the transaction, expected to total GBP125,000, and to provide the company with working capital whilst it seeks a suitable reverse takeover candidate.
The independent directors of Cellcast have unanimously recommended that shareholders vote in favour to approve the disposal.
Subject to shareholder approval at general meeting on September 6, the company plans to change its name to Vintana PLC.